The Benefits of Proper Risk Budgeting

My latest post for Alpha Baskets considers when to think about game over for investing in risk assets. This is mostly for people who are ahead of the game but the bigger conversation is about proper asset allocation. Arguably investing for a $10,000 monthly retirement will be different that investing in a $3000 monthly retirement and so it is worth looking in the mirror and trying to reduce expenses even if you can’t get down to $3000. From the post. It is important that someone lucky enough to be in this position not eliminate risk assets for several reasons mostly having to do with an unknown future that could include some sort of personal financial shock, loss of purchasing power due to unexpected inflation or any other expected outcome. Please click through to read the entire...

11 Investing and Personal Finance Hacks

I’m a sucker for the those life hack articles that you see on Facebook and other places so I thought it would be fun to do something along these lines for investing and personal finance at Alpha Baskets. From the post; 5) Avoid investment dogma. People at Bogleheads passionately defend indexing, people at Seeking Alpha passionately defend dividend growth and I am sure that there are other sites where people passionately defend swing trading, penny stocks and everything else. Passion is an emotion and ideally there should be less emotion in investing not more. Save the passion for your work, sports team or your volunteer work. Please click through to read the entire...

QE Invades Europe

This week’s Market Update is posted at Alpha Baskets and covers a lot of ground including the fallout from QE in Europe. From the update: The ECB QE news moved interest rates noticeably. The German bund yield fell to 0.36%, French OAT now yields 0.54%, Spain’s ten year fell to 1.38% and Italy now yields 1.53% compared to 1.81% in the US. Last week we noted that in reaction to the Swiss National Bank dropping its peg to the euro its ten year yield fell to 0.03%. The ECB news sent Swiss ten year yields to negative 26 basis points. In related news the central banks of Denmark and Canada also cut rates. Ten year paper in Denmark yields 42 basis points and in Canada ten years will get you 1.45%. Please click through to read the entire update.   Early Saturday morning in the Chiado section of...

The Swiss Rock The Markets

The Weekly Market Update is posted at AlphaBaskets and looks at all sorts of things going on including the Swiss National Bank, the deflation story being told in global bond markets and ongoing volatility in the oil market. From the update The immediate reaction to the news sent Swiss franc up 30% against the euro and 25% against the US dollar before closing the day with gains of 19% and 18% respectively. These would be large moves for multi-year periods let alone one day. Bonds also reacted swiftly. The Swiss ten year bond yield cut more than in half to 0.08% on Thursday and fell further on Friday to 0.03% which is at least in part a deflationary story. Please click through to read the entire update.   As I mentioned last week we were in Spain dealing with a difficult family issue. We then took a couple of days to head over to Lisbon. The one picture is Estadio da Luz which is home to the Benfica Futbol club and the other picture is of some street in Lisbon that is very typical of the area we stayed in which is called Chiado. Full disclosure; the picture is heavily filtered on...

Barron’s Makes The Case For Active Management

  My latest for Alpha Baskets looks at the case for active management made over the weekend in Barron’s. From the post; If Barron’s turns out to be correct about rising rates being a better back drop for active then that is likely to last for a while once interest rates do start to move. If that turns out to be the case then the recency effect will swing the other way, investors will give up passive which will be just as silly as giving up on active now. Please click through to read the entire post. I am back in Spain this week, my wife cam with me this time, to deal with my father’s situation. I expect that I will have more to say on this short but in the mean time here are a couple of pictures from our hotel.  ...